Samsung Electronics Co., Ltd. (KRX:005930) is investing around 53 billion won ($48 million) for a 10% stake in Pantech, the third largest mobile device manufacturer in South Korea, according to Yonhap. This deal will “help further solidify” Samsung’s relationship with Pantech. SAmsung will be a passive investor and will not provide input for Pantech’s management decisions, likely to avoid anti-competitive concerns.
Samsung and Pantech already work together on building semiconductor and displays. According to TheNextWeb, Pantech spent around 235 billion won ($211 million) buying electronics and components from Samsung-affiliated businesses to help build their own devices last year alone.
Even though Pantech is partnered with Samsung, they are also fierce competitors. Pantech’s devices competes against Samsung’s smartphones and tablets. The Pantech brand is popular in Korea, but they do not sell many devices overseas.
In this past Mobile Word Congress event, Pantech unleashed the Android-based Vega No 6 device, which is the world’s largest full-HD smartphone. Pantech’s Discover device is available for $50 with a contract in the United States.
Pantech is struggling financially compared to their rivals. Last year the company set up a five-year refinancing program to help manage their fiscal development. Samsung is now the third-largest shareholder in Pantech after Qualcomm (11.96%) and the Korea Development Bank (11.81%). Samsung’s investment follows a $100 million investment that they made in Sharp.